Key facts
- Pictet's Strategic Income Fund has grown to $5.1 billion from $1.6 billion this year.
- About 60% of the fund's assets are from mainland Chinese retail investors via the Mutual Recognition of Funds (MRF) scheme.
- The fund attracted HK$16.3 billion ($2.08 billion) in net inflows via the MRF channel in the first half of the year.
- The fund's top holdings include U.S. Treasuries, gold, Amazon, Alphabet, and Nvidia.
- The fund is up 17% for the first eight months of the year.
Pictet's Strategic Income Fund has seen its assets under management triple to over $5 billion this year, largely driven by Chinese investors seeking overseas assets. The fund's growth is partly attributed to a crackdown by Beijing on unlicensed offshore brokerage accounts, pushing investors towards legal cross-border channels like the Mutual Recognition of Funds (MRF) scheme.
According to Freeman Tsang, head of intermediaries for Asia ex-Japan at Pictet Asset Management, about 60% of the fund's $5.1 billion in assets came from mainland Chinese retail investors through the MRF. This scheme allows qualified Hong Kong funds to be sold in mainland China. Tsang cited declining deposit yields in China and the strong performance of sectors like AI and US tech giants as reasons for the increased demand.
China's May crackdown on "illegal" cross-border securities aimed to channel investments through legal means. While the Qualified Domestic Institutional Investor (QDII) program remains a key channel, tighter quotas have led foreign managers to explore newer avenues like MRF and Wealth Management Connect. The Pictet Strategic Income Fund led MRF net inflows in the first half of the year, attracting HK$16.3 billion ($2.08 billion). Its top holdings include U.S. Treasuries, gold, and major US tech companies such as Amazon, Alphabet, and Nvidia. The fund has gained 17% year-to-date, following an 18% gain in 2025. Tsang anticipates MRF will become a mainstream channel and plans to apply for two additional MRF funds.